The Crisis Blog

Adding fuel to BP’s already massive crisis fire, which reignited anew today, the government charged the company and two supervisors with felony manslaughter counts for the 11 deaths directly related to the oilrig explosion in the Gulf of Mexico in 2010. This is on top of the $4.5 billion fine the company already agreed today to pay – the largest criminal penalty in U.S. history.

U.S. Attorney General Eric Holder announced a separate 23-count criminal indictment against the two top-ranking BP oilrig supervisors who were in charge of the Deepwater Horizon well when the explosion occurred. Holder also unveiled an indictment against BP vice president David Rainey, who was charged with hiding information and lying during the company’s woefully inept crisis communications debacle before Congress soon after the oil spill. This was the testimony I said in an earlier blog had the handprints of many, many lawyers all over it – lawyers who undoubtedly counseled their clients to say as little as possible and admit to nothing. How’s that advice working out for you now, BP?

In a classic wishful-thinking statement, BP’s chairman, Carl-Henric Svanberg, said, “We believe this resolution is in the best interest of BP and its shareholders…and removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

But in the real world, a guilty plea or a conviction in a criminal matter hurts, not helps, a company in ensuing civil cases. If the company thinks a guilty plea in a criminal case will help it when facing almost identical charges in a civil case, it is delusional. The company faces numerous federal civil claims, including Clean Water Act claims, as well as additional civil claims from the government and from countless private individuals.

Even though the company made a big show of it and said it is “prepared to vigorously defend itself against remaining civil claims,” from a crisis management and crisis communications perspective, it would be more prudent for the company to bite the bullet and settle all matters and then put this entire fiasco into its rear view mirror as quickly as possible.

That and that alone will benefit shareholders. Failure to resolve all outstanding matters as quickly as possible will also hinder the company’s plans to bid on future government drilling contracts.